Greece raises $5b for debt payment

Sale of bills comes as funds dwindle

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Public-sector employees protested expected layoffs on Tuesday in central Athens. The sale of short-term treasury bills may avert some woes: The $5 billion raised will help Greece make a crucial debt repayment by the end of the week.

Associated Press
November 14, 2012

ATHENS — Greece raised $5.15 billion from the sale of short-term treasury bills Tuesday, money that will help it make a crucial debt repayment at the end of the week.

With the disbursement of a massive $40.1 billion installment from Greece’s international bailout long delayed, the country’s finances have gone down to the wire. Without Tuesday’s sale, Athens would have found it impossible to repay the $6.4 billion treasury bill maturing on Friday, the day on which Prime Minister Antonis Samaras has said Greece would run out of money.

Despite concerns over Greece’s long-term economic outlook, the country’s euro partners and the International Monetary Fund are expected to agree on the release of the next tranche of the bailout over the next week.

The country’s debt management agency raised $3.51 billion from the sale of four-week bills at an interest rate of 3.95 percent, and $1.66 billion of 13-week bills at 4.2 percent. The sale of the latter came at a marginally lower interest rate than the 4.24 percent seen in the previous equivalent auction in October.

The debt management agency will also be accepting noncompetitive bids of up to another 30 percent of the auctioned amount until Thursday, as occurs with all Greek treasury bill sales — as a result, the country should be in a position to cover Friday’s repayment.

Greece has been locked out of the international long-term debt market by exceptionally high interest rates demanded for its bonds since 2010, and has been relying on funds from rescue loans by other European countries that use the euro, and the International Monetary Fund, since May of that year. It has been carrying out short-term debt sales to bolster its cash supply while receiving bailout loans.

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